China’s HNA to buy 25% Hilton stake from Blackstone

Chinese shipping and aviation giant HNA Group will buy a roughly 25 percent stake in Hilton Worldwide Holdings from Blackstone Group, the company announced Monday.

Under the $6.5 billion deal, HNA will pay just over $26 a share in cash for the stake, which is 15 percent more than Hilton’s Friday closing price of just under $23 a share, the Wall Street Journal reported. The sale will reduce Blackstone’s holding to 21 percent and make HNA the biggest shareholder in the company.

Earlier this year, Hilton announced around 70 percent of its hotel properties would be spun off into a publicly-traded real estate investment trust. The move splits Hilton into three district entities. HNA will own around 25 percent of all three companies upon the closing, which is expected to take place in the first quarter of 2017.

Negotiations between HNA and Blackstone reached an advanced stage in June, according to the Journal.

HNA agreed to hold onto the stake for two years, and will need board approval to purchase any more shares. Both HNA and Hilton want to make use of China’s expanding outbound tourism market.